The need for secure communication is ancient and has grown to paramount importance. Any system implementing an electronic transfer of funds, for example, requires multi-level security measures. The simple acts of assigning and using a Personal Identification Number (PIN) to access the ATM debit network requires the use of highly controlled protocols and/or hardware.
Any transaction is susceptible to fraud and deceptions. Even a face-to-face encounter between a customer and banker could be subject to frauds of impersonation or false identity. Transactions between strangers and more particularly, transactions conducted on an open-network like the Internet cannot be conducted within reasonable risk limitations without some kind of identity verification.
The use of a PIN provides a certain level of verification, as we assume that the only person with knowledge of the PIN should be the authorized cardholder. Of course, any communication of the PIN is subject to eavesdropping, interception or man-in-the-middle attacks. When connecting to the ATM network, the PIN may not be transmitted, even in encrypted form, over open networks.
Information does not have to be transmitted to be communicated, however. For example, zero-knowledge techniques can be used to communicate information without transmitting the information. Zero-knowledge protocols take advantage of the fact that possession of data can be proved without revealing the data.
Another method of communicating information without transmitting the information can be seen in a PIN mailer process. The PIN mailer process allows a cardholder to select a PIN using a form and the paper mail. The PIN mailer process is compliant with current ANSI standards and accepted in the banking industry.
The card issuer associates a form with a card that has been issued to a cardholder. The association is typically to a specific form using a serial number and may be an association to a form type using a form ID. The card issuer sends the associated form to the cardholder. The cardholder is instructed to select a PIN for a given account by completing a paper-based form and delivering it to the card issuer or the issuer's producer via normal mail. The paper form that the cardholder completes is designed specifically for the purpose. First, it is typically a multi-layer carbon-copy form. The form includes a top page for entering the PIN in a manner that is clearly understandable to the user. The top page allows the insecure entry of the information. According to protocol, the top page is destroyed by the cardholder as soon as the PIN is entered, so that there is no insecure copy of the information. The bottom page, or pages, are specifically designed to protect the data that has been entered. Parts of the page may be generated through cryptographic processes to further obscure the data. The cardholder completes the form by selecting their PIN on the top page by circling one or more values or filling in bubbles representing their desired PIN. Position information is transferred through to the bottom page. The position information does not include, in any form, the numerals that make up the PIN. The encoded information represents the position of the PIN on the now-destroyed top sheet.
Once the cardholder destroys the top page of the form, there is no cleartext or encrypted version of the PIN. This bottom page containing position information is then sent via normal mail to the card issuer. The page is safe from an interception attack because the form has no information identifying the cardholder and no information to assist in identifying the numerals associated with the position data. The card issuer is able to retrieve the value representing the PIN from the returned ‘bottom’ page and information related to the request form, such as a form number or serial number.
What is needed, therefore, is a system and method for transferring information over an open network in a secure manner.